INCLINE VILLAGE, Nev. — It’s not just the ambient air temperature that is feeling a lot warmer these days — activity among Incline Village real estate buyers is the strongest we have seen during the past five years. Just last week, seven properties went into escrow and 14 properties closed escrow. When you take a close look at the Incline Village MLS and see 74 properties with accepted offers, it's a solid indicator that our local market is performing better than at any time since 2007.
So just how strong is the sales activity In Incline Village and Crystal Bay when compared with the last few years? I have been keeping track of these statistics on my website and the numbers are very revealing. The inventory of houses, freestanding condos and condos for sale at the beginning of July 2012 is 368 units compared with 501 properties for sale at the same time in 2008. Instead of between 20 and 30 new listings each week during the peak selling season we are seeing between 12 and 18 new listings.
And the number of properties going into escrow and closing escrow on a regular basis is up dramatically. We’ve already seen 122 properties change hands to new owners in 2012 as compared to only 89 during the first six months of 2008. That is around a 40 percent increase in sales compared to when the real estate market was having earthquakes during the first stages of the market slump. We had 104 properties close escrow through the end of June last year, but only about half as many properties in escrow at the same time then as we do today. The trendline is clear; Incline Village and Crystal Bay real estate sales are moving back in the direction of a normal market which is approximately 275 to 325 sales per year.
The combination of value priced properties, a good variety of inventory and historically low interest rates is causing large numbers of buyers to search for and purchase vacation homes on the North Shore of Lake Tahoe. The normal factors that drive the Incline Village and Crystal Bay real estate market which include a healthy economy in the San Francisco Bay Area and Silicon Valley along with rising real estate prices in those markets have helped to fuel sales activity up here.
But there are two other significant issues that that are coming more into play as we get deeper into 2012. There have been a number of initial public stock offerings for companies based in Northern California and the lockup periods have either started to expire or will in the near future. Some of the people holding stock options will purchase vacation homes purely for enjoyment. But the other part of the equation is the ever-changing income tax situation in California.
California personal income taxes are punitive when compared to the lack of a state income tax in Nevada especially for anyone earning over $200,000 per year. With marginal tax rates for the highest earners in double digits for California residents, there is a great incentive to take your stock option money and establish your primary residence in Nevada. Since many people in the high tech world can work anywhere they have a high-speed Internet connection, overnight delivery service and access to an airport, the Nevada side of North Lake Tahoe suddenly becomes very tantalizing.
Anecdotal evidence based on my discussions with other agents and brokers during the past few weeks indicates that sales activity is stronger than at any time since 2007. Agents in general are showing properties in all price ranges on a much more regular basis and writing more offers. The properties currently in escrow range from $85,000 all the way up to $9.5 million and the condo market is showing particular strength with 34 properties under contract. It appears we have worked our way through the oversupply of inventory that existed from 2008 through early 2011. The result of the market shakeout the past 4 years is that buyers in greater numbers are able to find affordable properties and this increase in demand is the precursor to the next leg up for Incline Village and Crystal Bay real estate prices in the coming years.
— Don Kanare is a Realtor at RE/MAX Premier Properties. Read his blog and weekly stats on his website at www.InsideIncline.com.